A Practical Guide to the NEC4 Engineering and Construction Contract

MICHAEL ROWLINSON MSc, DipArb, MRICS, FCIOB, FCIArb, FCInstCES, is principal of Michael Rowlinson Associates Ltd. An experienced construction professional having qualified initially as a Chartered Quantity Surveyor and later as a Chartered Builder, Michael specialises in all aspects of contract drafting, contract management, contract administration, construction law, claims and dispute resolution. As part of his work Michael lectures extensively and has written many published articles and two books on the NEC3 family of contracts.

1 Introduction 1 1.1 General 1 1.2 Mechanics not law 2 1.3 A simple formula for understanding a contract 3 1.4 Mandatory or discretionary 4 1.5 Conditions precedent 4 1.6 Note on use of uppercase in keywords and phrases 5 2 Background to the NECECC 7 2.1 The background: First edition 7 2.2 The second edition 8 2.3 The third edition 9 2.4 The third edition (reprinted) 9 2.5 The fourth edition 9 2.6 Endorsement of NEC3 by the Office of Government Commerce 10 2.7 Endorsement by the Development Bureau, HKSAR Government 11 2.8 General philosophy: Aims and objectives 12 2.9 Flexibility 12 2.10 Clarity and simplicity 13 2.11 Stimulus to good management 14 2.12 Other characteristics 15 3 The Options: An Overview 17 3.1 General arrangement of the ECC 17 3.2 Other documents referred to 19 3.3 Contract Data 20 3.4 The published documents 20 3.5 Main Options: General outline 21 4 Spirit of Mutual Trust and Cooperation 25 4.1 Introduction 25 4.2 The clauses 25 4.3 What does it mean? 27 4.4 Practical issues 28 5 The Cast of Characters 33 5.1 Introduction 33 5.2 The Client 33 5.3 The Project Manager 35 5.4 The Supervisor 38 5.5 The Contractor 38 5.6 The Senior Representatives 39 5.7 The Adjudicator 40 5.8 The Tribunal 41 5.9 The Dispute Avoidance Board 41 5.10 Subcontractors 42 5.11 'Others' 42 5.12 Named Suppliers 43 5.13 Designers 43 5.14 Principal Designer 44 5.15 Principal Contractor 45 5.16 Practical issues 45 6 Communications, Early Warnings and other General Matters 47 6.1 Introduction 47 6.2 Communications:The clause 47 6.3 Communications: Practical issues 49 6.4 Early warnings: The clause 51 6.5 Early warnings: Practical issues 53 6.6 Other matters:The clauses 55 6.7 Other matters: Practical issues 59 7 The Contractor's Main Responsibilities 61 7.1 Introduction 61 7.2 Providing theWorks 61 7.3 Contractor's design 62 7.4 Information modelling 66 7.5 Other matters 68 7.6 Practical issues 72 8 Subcontracting 75 8.1 Introduction 75 8.2 Definition of a Subcontractor 75 8.3 The core clauses 76 8.4 Provisions in the Main Options 76 8.5 Practical issues 77 8.6 Options for forms of subcontract in the NEC4 family 78 9 Quality Management 81 9.1 Introduction 81 9.2 Quality management system 81 9.3 Tests and inspections 82 9.4 What is a Defect? 84 9.5 The Defect procedure 84 9.6 The Defects Certificate 86 9.7 Uncorrected Defects 87 9.8 Practical issues 87 10 Title 91 10.1 Introduction 91 10.2 The core clauses 91 10.3 Practical issues 92 11 Liabilities and Insurance 95 11.1 Introduction 95 11.2 The core clauses 95 11.3 Secondary options 98 11.4 Practical issues 99 12 Time 101 12.1 Introduction 101 12.2 The programme: Contents 102 12.3 The programme: Submitting, accepting and revising 107 12.4 The programme: Practical issues 110 12.5 Starting and finishing 118 12.6 Other matters 121 12.7 Secondary Options related to Time 124 12.8 Practical issues 126 13 Payment 131 13.1 Introduction 131 13.2 The payment process 131 13.3 Payments in multiple currencies 134 13.4 Interim payments - The amount due and the Price for Work Done to Date 135 13.5 Supporting documents and records 145 13.6 Final assessment 148 13.7 The Contractor's share 150 13.8 The Contractor's share: Practical issues 152 13.9 Special provisions for the United Kingdom 153 13.10 Related Secondary Options 157 13.11 Practical issues 162 14 The Schedules of Cost Components 169 14.1 Introduction 169 14.2 The Schedule of Cost Components 169 14.3 The Short Schedule of Cost Components 174 14.4 Application to Subcontractors 175 14.5 Practical issues 1